Today: Friday, 18 September 2020 year

Air France-KLM to get $3.8 bm in aid from the Netherlands

Air France-KLM to get $3.8 bm in aid from the Netherlands

Air France-KLM’s Dutch arm will get a certain amount from the Netherlands. The 3.4-billion-euro bailout from the government aimed at helping the carrier needed to ride out the unexpected crisis, Bloomberg reports.

KLM, a royal Dutch airlines, will receive 2.4 billion euros of state-backed commercial funding and 1 billion euros in direct government loans, Dutch Finance Minister Wopke Hoekstra said in a letter to parliament Friday.

The aid comes on top of 7 billion-euros of loans and guarantees from the French government for Air France and further hammers home the reliance by Europe’s biggest airlines on state aid to get through the industry slump.

On Thursday, rival Deutsche Lufthansa AG won shareholder approval for a 9 billion-euro bailout from the German government. Both France and the Netherlands are shareholders of Air France-KLM, the region’s second-biggest airline group after Lufthansa.

The Dutch support comes with strings attached, with KLM required to suspend dividend payments.

The carrier secured the aid after the Netherlands said two months ago that it would provide between 2 billion euros and 4 billion euros of assistance.

The European airlines are struggling against financial crisis caused by the novel pathogen

French Finance Minister Bruno Le Maire agreed in April to provide 4 billion euros of state-backed commercial funding and 3 billion euros of direct state loans to Air France, which must curb domestic flying by 40%.

While governments across Europe have stepped in to help airlines, the packages from Air France-KLM and Deutsche Lufthansa AG are by far the biggest.